WORLD BUSI­NESS

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China’s econ­omy ex­panded at its slow­est rate in nearly three decades in the third quar­ter, hit by cool­ing do­mes­tic de­mand and a pro­tracted U.S. trade war, data showed Fri­day, with an of­fi­cial warn­ing of “mount­ing down­ward pres­sure.”

BEI­JING (AFP) — China’s econ­omy ex­panded at its slow­est rate in nearly three decades in the third quar­ter, hit by cool­ing do­mes­tic de­mand and a pro­tracted U.S. trade war, data showed Fri­day, with an of­fi­cial warn­ing of “mount­ing down­ward pres­sure.”

Gross do­mes­tic prod­uct ex­panded 6.0 per­cent in July-Septem­ber, down from 6.2 per­cent in the sec­ond quar­ter, ac­cord­ing to the Na­tional Bureau of Sta­tis­tics (NBS).

The read­ing — in line with an AFP sur­vey of 13 an­a­lysts — is the worst quar­terly fig­ure since 1992 but within the gov­ern­ment’s tar­get range of 6.0-6.5 per­cent for the whole year. The econ­omy grew 6.6 per­cent in 2018.

“The na­tional econ­omy main­tained over­all sta­bil­ity in the first three quar­ters,” said NBS spokesman Mao Shengy­ong.

“How­ever, we must be aware that given the com­pli­cated and se­vere eco­nomic con­di­tions both at home and abroad, the slow­ing global eco­nomic growth, and in­creas­ing ex­ter­nal in­sta­bil­i­ties and un­cer­tain­ties, the econ­omy is un­der mount­ing down­ward pres­sure.”

Ser­vices and high-tech man­u­fac­tur­ing were the key ar­eas of growth, while em­ploy­ment was “gen­er­ally sta­ble”, he added.

Prop­ping up econ­omy

Bei­jing has stepped up sup­port for the econ­omy with ma­jor tax and rate cuts and has scrapped for­eign in­vest­ment re­stric­tions in its stock mar­ket.

On Wed­nes­day the cen­tral bank said it was pump­ing 200 bil­lion yuan ($28 bil­lion) into the fi­nan­cial sys­tem through its medium-term lend­ing fa­cil­ity to banks, which is de­signed to main­tain liq­uid­ity.

But the ef­forts have not been enough to off­set the blow from softening de­mand at home.

The trade con­flict and weak do­mes­tic de­mand prompted the In­ter­na­tional Mon­e­tary Fund to lower its 2019 growth fore­cast for China to 6.1 per­cent from 6.2 per­cent on Tues­day.

The long-run­ning trade war with the U.S. has also chipped away at the Chi­nese econ­omy.

This week, Bei­jing posted weaker-than-ex­pected im­port and ex­port fig­ures for Septem­ber af­ter Washington im­posed new tar­iffs that month.

And there were mixed sig­nals for the econ­omy in Septem­ber.

In­dus­trial out­put rose 5.8 per­cent, from 4.4 per­cent in Au­gust, led by a surge in de­mand for so­lar pan­els and elec­tric ve­hi­cles, ac­cord­ing to the NBS.

But fixed-as­set in­vest­ment slid to 5.4 per­cent on-year in Jan­uary-Septem­ber, from 5.5 per­cent in Jan­uary-Au­gust, as the gov­ern­ment warned against risky bor­row­ing to build roads and bridges that could ar­ti­fi­cially pump up GDP in the short run.

China’s army of con­sumers were slowly start­ing to open their wal­lets again, with re­tail sales edg­ing up 7.8 per­cent on-year in Septem­ber, com­pared with 7.5 per­cent in Au­gust.

“De­spite a stronger Septem­ber, pres­sure on eco­nomic ac­tiv­ity should in­ten­sify in the com­ing months,” said Julian Evans-Pritchard of Cap­i­tal Eco­nom­ics in a note.

He said he ex­pects in­fra­struc­ture spend­ing to de­cline as China tries to rein in toxic debt and added that the re­cent boom in prop­erty de­vel­op­ment “looks set to un­wind”.

“We ex­pect mon­e­tary pol­icy to be loos­ened be­fore long in re­sponse, but it will take time for this to put a floor be­neath eco­nomic growth,” he added.

Let’s make deal

A “phase one” deal an­nounced by U.S. Pres­i­dent Don­ald Trump last Fri­day af­ter he met China’s top ne­go­tia­tor Liu He in Washington of­fered a tem­po­rary re­prieve from fur­ther tar­iff hikes.

NBS spokesman Mao said the mini-deal was “good sign” for global mar­kets.

“We feel that the global econ­omy and global trade are in­creas­ingly mov­ing to­wards re­duc­ing pro­tec­tion­ism and… freedom,” he said.

AP-Yon­hap

Con­tain­ers are piled up at a port in Qing­dao in east China’s Shan­dong prov­ince in this May 14 file photo.

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